Lean canvas experiment board Startup validation

Lean Canvas & Experiment Board: Startup Validation

@vishnugopal

Because a lot of things you do in a startup is not

“intuitively” right.

“Gut feel” is wrong a lot.

1 + 2 + 3 + 4 + 5 + … ∞ = ?

∞

1 + 2 + 3 + 4 + 5 + … ∞ = - 1/12

“Gut feel” is wrong a lot.

One way to validate is to experiment cheaply.

Experiment cheaply = test as early as possible

1st Tool: Experiment Board

My Gut Feel Idea: “A fast search engine to

find cars”

ExperimentsStart here. Brainstorm with stickies, pull it over to the right to start your experiment.

Customer

Problem

Solution

Result &Decision

Learning

RiskiestAssumption

Method & SuccessCriterion

1 2 3 4 5

To form a Customer/Problem Hypothesis:I believe my customer has a problem achieving this goal.

To form your Assumptions:0U�VYKLY�MVY�̸hypothesis to be true, assumption needs to be true. Determine how you will test it:The least expensive way to test my assumption is...

>OV�PZ�`V\Y�J\Z[VTLY&�)L�HZ�ZWLJPÄJ�HZ�WVZZPISL�� Time Limit: 5 Min

What is the problem? Phrase it from your customer’s perspective. Time Limit: 5 Min

+LÄUL�[OL�ZVS\[PVU�VUS`�HM[LY�`V\�OH]L�]HSPKH[LK�H�WYVISLT�^VY[O�ZVS]PUN��Time Limit: 5 Min

List the assumptions that must hold true, for your hypothesis to be true. Time Limit: 10 Min

Need help? Use these sentences to help construct your experiment.

To form a Problem/Solution Hypothesis:I believe this solution will resultin X\HU[PÄHISL�V\[JVTL.

To identify your Riskiest Assumption:The assumption with the leastamount of data, and core to the viability of my hypothesis is...

Determine what success looks like:I will run experiment with # of customers and expect a strong signal from # of customers.

Project Name: Team Leader Name:

GET OUT OF THE BUILDING!

© 2014 Javelin. You are free to use it and earn money with it as an entrepreneur, consultant, or executive, as long as you are not a software company (the latter need to license it from us).Download Experiment Board and watch case studies at www.javelin.com


Customer

Problem

Solution

Result &Decision

Learning

RiskiestAssumption


1 2 3 4 5














First time car buyers

People with little knowhow about cars

Car selling showrooms


Customer

Problem

Solution

Result &Decision

Learning

RiskiestAssumption


1 2 3 4 5

















Too many choices for

cars

Searching for cars is

slow

They don’t get reviews from friends


Customer

Problem

Solution

Result &Decision

Learning

RiskiestAssumption


1 2 3 4 5


















cars


slow

Terms like Bhp, Cc is

too technical

Customers are

only interested

in cost, fuel efficiency,

looks

Customers trust reviews

from friends



Customer

Problem

Solution

Result &Decision

Learning

RiskiestAssumption


1 2 3 4 5















Customer

Problem

Solution

Result &Decision

Learning

RiskiestAssumption


1 2 3 4 5


















cars


slow

Terms like Bhp, Cc is

too technical

Customers are

only interested

in cost, fuel efficiency,

looks

Customers trust reviews

from friends



Customer

Problem

Solution

Result &Decision

Learning

RiskiestAssumption


1 2 3 4 5
















cars

Customers are

only interested in cost, fuel efficiency,

looks

Interview: More than 80%

The biggest learning from the experiment

board?

Get out of the building!

Don’t build until you know it’s something that people

want (& can pay for)

2nd Tool: Brainstorming Tool

Lean Canvas

Business Model Canvas

Revenue Streams

LEAN CANVAS

Channels

UnfairAdvantage

Customer Segments

Unique ValueProposition

SolutionProblemTop 3 problems

1

7 6

23

product market

98

4 5

Customer Acquisition Costs

Distributing Costs

Hosting

People, etc.

Revenue Model

Lifetime Value

Revenue

Gross Margin

Top 3 features

Single, clear, compelling message that states

why you are different and worth buying

Can’t be easily copied or bought

Target Customers

Path to customers

Key activities you measure

KeyMetrics

Cost Structure

Designed by: Date:

/ /Version #:Project:

This work is adapted from Lean Canvas (http://leancanvas.com/) and is licensed

under the Creative Commons Attribution-Share Alike 3.0 Un-ported License.

Revenue Streams

LEAN CANVAS

Channels

UnfairAdvantage

Customer Segments



1

7 6

23

product market

98

4 5


Distributing Costs

Hosting

People, etc.

Revenue Model

Lifetime Value

Revenue

Gross Margin

Top 3 features




Target Customers

Path to customers


KeyMetrics

Cost Structure

Designed by: Date:




!Problem:

Top 3 Problems !

What are the problems you are trying to solve?


have too many choices

and no simple way to

pick cars

People want to know only

a few facts about cars:

looks, mileage, cost, not

technical terms

There is no easy way to

get reviews from friends

about cars

Revenue Streams

LEAN CANVAS

Channels

UnfairAdvantage

Customer Segments



1

7 6

23

product market

98

4 5


Distributing Costs

Hosting

People, etc.

Revenue Model

Lifetime Value

Revenue

Gross Margin

Top 3 features




Target Customers

Path to customers


KeyMetrics

Cost Structure

Designed by: Date:




!Customer Segments:

Target Customers !

Who has these problems?


People with less technical

knowhow about cars

Car showroom owners

Revenue Streams

LEAN CANVAS

Channels

UnfairAdvantage

Customer Segments



1

7 6

23

product market

98

4 5


Distributing Costs

Hosting

People, etc.

Revenue Model

Lifetime Value

Revenue

Gross Margin

Top 3 features




Target Customers

Path to customers


KeyMetrics

Cost Structure

Designed by: Date:




!Unique Value Proposition

!USP. Why is your product different from competitors

and worth buying?

I have a team of experts

ready to review cars

I can poll social media

opinion about cars & come

up with a comprehensive

sentiment score

I have a unique

recommendation system

for cars from friends

Revenue Streams

LEAN CANVAS

Channels

UnfairAdvantage

Customer Segments



1

7 6

23

product market

98

4 5


Distributing Costs

Hosting

People, etc.

Revenue Model

Lifetime Value

Revenue

Gross Margin

Top 3 features




Target Customers

Path to customers


KeyMetrics

Cost Structure

Designed by: Date:




!Solution

!Top 3 key features of your solution.

A simple curated list for

cars. e.g: “Best car if

you are starting a family”

View curated reviews

about cars from Facebook,

Twitter, etc.

Once you select a car,

easily post a survey to

Twitter/Facebook to ask

friends about it

Revenue Streams

LEAN CANVAS

Channels

UnfairAdvantage

Customer Segments



1

7 6

23

product market

98

4 5


Distributing Costs

Hosting

People, etc.

Revenue Model

Lifetime Value

Revenue

Gross Margin

Top 3 features




Target Customers

Path to customers


KeyMetrics

Cost Structure

Designed by: Date:




!Unfair Advantage

!Can competitors easily copy your solution? If not,

why?

My sentiment analysis

engine is awesome and

hard to replicate

I have a team of experts

whose sole job is to go

through cars and pick only

the best

I have tied up with a lot of

car dealers to promote my

site

Revenue Streams

LEAN CANVAS

Channels

UnfairAdvantage

Customer Segments



1

7 6

23

product market

98

4 5


Distributing Costs

Hosting

People, etc.

Revenue Model

Lifetime Value

Revenue

Gross Margin

Top 3 features




Target Customers

Path to customers


KeyMetrics

Cost Structure

Designed by: Date:




!Revenue Streams

!How do you make money? What is

the revenue model?

!What is the

lifetime value of a customer?

!What is the projected revenue?

!What is the

possible gross margin?

Advertising Revenue

Customers can opt for

insurance through my

site, I get a cut

Advertising

Projections: 10L in Y1

Insurance Projections:

20L in Y1

Gross Margin is High:

~80%

Revenue Streams

LEAN CANVAS

Channels

UnfairAdvantage

Customer Segments



1

7 6

23

product market

98

4 5


Distributing Costs

Hosting

People, etc.

Revenue Model

Lifetime Value

Revenue

Gross Margin

Top 3 features




Target Customers

Path to customers


KeyMetrics

Cost Structure

Designed by: Date:




!Cost Structure

!What are possible

expenses? !

Customer Acquisition Costs (like marketing)

!Distributing costs (30% of revenue in case of App

Store) !

Hosting !

People

Marketing Costs: 30L

in Y1

No distribution costs

Minimal hosting costs

Good payment to

experts & review

writers: 10L in Y1

Revenue Streams

LEAN CANVAS

Channels

UnfairAdvantage

Customer Segments



1

7 6

23

product market

98

4 5


Distributing Costs

Hosting

People, etc.

Revenue Model

Lifetime Value

Revenue

Gross Margin

Top 3 features




Target Customers

Path to customers


KeyMetrics

Cost Structure

Designed by: Date:




!Key Metrics

!What will you measure for

product success? !

Measure your USP.

Site visits

Conversions through site

Insurance purchases

through site

Revenue Streams

LEAN CANVAS

Channels

UnfairAdvantage

Customer Segments



1

7 6

23

product market

98

4 5


Distributing Costs

Hosting

People, etc.

Revenue Model

Lifetime Value

Revenue

Gross Margin

Top 3 features




Target Customers

Path to customers


KeyMetrics

Cost Structure

Designed by: Date:




!Channels

!How will you distribute to customers?

!Channels should

be simple to understand, low

friction.

Online advertising

App on App Store/Play

Store

Displays in dealer

showrooms

Lean Canvas is to make you think.

If you are going to spend 3+ years of your life on a startup,

spending 2 hours exploring it is not bad :)

Plus, it helps you write a business plan

Or a product deck

Startup Village is going to increasingly conduct Fundraising

pitches. Being prepared is half the journey.

Finis. Questions?

Lean canvas experiment board Startup validation

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